The metals market resumed growth at the beginning of August, supported by falling inventories and limited supply of industrial metals. According to Alpari analyst Anna Bodrova, copper prices exceeded $6.6 per pound, approaching historical highs; simultaneously, prices for gold, silver, and platinum strengthened.
Improved investor sentiment occurred after reports of a possible agreement between the United States and Iran regarding the resumption of operations in the Strait of Hormuz. This reduced concerns about a new wave of inflation and weakened expectations of tightening policy by the US Federal Reserve.
Gold is holding around the $4100 per ounce mark, while silver trades above $59.5 per ounce. Both precious metals recovered for the second consecutive day. The drop in oil prices against the progress in Hormuz negotiations decreased the probability of a Federal Reserve rate hike in September, which, according to the data provided, fell from approximately 67% to 57%.
Nevertheless, market participants have not yet reached final conclusions about the future policy of the US central bank. Federal Reserve representatives stated their readiness to raise rates if inflationary pressure increases. In the near future, investors will monitor new US employment data, which may influence forecasts regarding Federal Reserve decisions.
Platinum remains one of the strongest precious metals, with its price held above $1700 per ounce, close to its highest level in seven weeks. The price increase is supported by both improved market sentiment and fundamental factors. Valterra Platinum, the world's largest platinum producer, reported a significant increase in profit and expects further demand growth for the metal due to the development of artificial intelligence infrastructure. Furthermore, according to the analyst, the global platinum market is experiencing a supply deficit, which supports prices.
Copper showed the most noticeable dynamics among industrial metals, again exceeding the $6.6 per pound mark and nearing record levels. One of the key drivers of growth was the reduction in global reserves. Ahead of the US administration's decision on potential import tariffs, traders are actively redirecting copper supplies to the US market. In July, over 200,000 tons of this metal arrived in the United States, the highest monthly volume in more than a decade.
Concurrently, copper inventories at the London Metal Exchange fell to the lowest level in five months. Some of this metal was sent to China to cover local shortages. In the long term, demand for copper is also supported by the development of artificial intelligence, data center construction, and the global energy transition.
Aluminum prices also continued to rise, climbing above $3210 per ton and reaching its highest level in almost a month and a half. The main supporting factor remains supply constraints. In July, aluminum production outside of China decreased by nearly 7%, and inventories at the London Metal Exchange fell to the lowest level since tracking began. Production restrictions in China and lower output forecasts from major producers are also putting additional pressure on supply. It is expected that some new production capacity will come online by the end of the year, but the current market balance remains tight.
Overall, according to Alpari analyst Anna Bodrova, the metals market is gradually shifting focus from geopolitical risks to the fundamental balance of supply and demand. Softer inflation expectations support precious metals, while industrial metals are becoming the main market drivers. Reduced reserves, structural supply deficits, and sustained demand from the energy, infrastructure, and AI sectors create a foundation for maintaining high metal prices in the second half of the year.
The metals market resumed an upward trend in early August. This growth is supported by improved investor sentiment and a persistent deficit in the industrial metals segment, according to analysis conducted by Alpari analyst Anna Bodrova.
Reports suggest that a potential agreement between the United States and Iran regarding the resumption of operations in the Strait of Hormuz contributed to higher market sentiment by reducing concerns about accelerating inflation. Nevertheless, limited supply continues to support industrial metals, while the prospects for precious metals largely depend on future signals from the US Federal Reserve.
Gold is holding around the $4100 per ounce mark, and silver is trading above $59.5 per ounce. Both metals rose for the second consecutive day amid weakening expectations of further monetary tightening by the Federal Reserve against the backdrop of falling oil prices.
However, US central bank officials continue to signal readiness to raise interest rates if inflationary pressure increases. Market participants are currently awaiting new US employment data, which could influence future forecasts.
In the analyst's view, platinum remains one of the strongest precious metals. Its price exceeds $1700 per ounce, approaching a seven-week high. The metal continues to benefit from improving market sentiment and limited supply volumes.
Additional support was provided by a forecast from Valterra Platinum, the world's largest platinum producer, which expects demand growth due to infrastructure expansion supporting artificial intelligence technologies. Copper maintains its position as the leader among industrial metals. Its price has risen again above $6.6 per pound, nearing historical highs.
The analyst attributed this rise primarily to decreasing global copper reserves. Ahead of a potential decision by US authorities on import tariffs, suppliers increased shipments to the US market.
In July, over 200,000 tons of copper were delivered to the United States, marking the highest monthly volume in more than a decade. Simultaneously, inventory levels at the London Metal Exchange fell to their lowest level in five months, and some of the metal was redirected to China to cover local supply shortages.
Aluminum also continued to rise. Its price exceeded $3210 per ton, reaching its highest level in almost a month and a half.
Bodrova noted that the market continues to be supported by reduced production outside of China, record low inventories at the London Metal Exchange, production constraints in China, and revised output forecasts from major producers.
According to Alpari analyst, the metals market is gradually shifting its focus from geopolitical factors to the fundamental basis of supply and demand. While lower inflation expectations continue to support precious metals, industrial metals remain the main driver of the market, supported by limited reserves, structural supply deficits, and sustained demand from the energy sector, infrastructure projects, and artificial intelligence technologies.
